TIDMCRPR
RNS Number : 6144C
Cropper(James) PLC
22 June 2021
The advanced materials and paper products Group is pleased to
announce its
Preliminary results for the 52 weeks ended 27 March 2021
52 weeks 52 weeks ended
ended 27 28 March
March 2021 2020
GBP'm GBP'm
Revenue 78.8 104.7
Adjusted operating profit (excluding
IAS19 and exceptional items) 4.5 7.3
Operating profit 2.4 6.6
Adjusted profit before tax (excluding
IAS19 and exceptional items) 4.0 6.7
Impact of IAS19 on income statement (0.8) (1.2)
Exceptional items (1.5) -
Profit before tax 1.7 5.5
Earnings per share - basic and diluted 16.4p 50.6p
Dividend per share declared nil 2.5p
Net borrowings (7.5) (11.1)
Net borrowings (excluding right-of-use
leases) (3.7) (6.7)
Equity shareholders' funds 29.9 34.4
Gearing % - before IAS 19 deficit 17% 26%
Gearing % - after IAS 19 deficit 25% 32%
Capital expenditure 3.1 9.2
Highlights
-- Primary focus on employee health during the pandemic.
-- Demand reduced by 25% across the Group, with the paper division affected most.
-- Organisation restructure aligned to support growth and reduce costs by GBP2m p.a.
-- Colourform revenues up 9% at GBP2.6m.
-- GBP2.9m of government support in UK and USA received in the period.
-- Brexit successfully managed with no lasting material impact on the Group.
-- Acquisition of PV3 Technologies in January to accelerate penetration of hydrogen market.
-- At 27 March 2021, the Company has liquidity of over GBP11m
including cash and available overdraft facilities.
-- All investments restarted in the new financial year to support growth.
-- No final dividend proposed as part of cash preservation
exercise against the impact of Covid-19.
Mark Cropper, Chairman, commented:
" I am pleased to report that in the event the year has passed
as well as we might have hoped. We have managed to keep operating
throughout and most importantly our workforce has stayed safe.
"
" That we find ourselves in this position speaks volumes for the
unprecedented commitment of everyone across the Group. "
" Our mantra since the earliest days of the Covid crisis has
been to "emerge stronger." This time last year it was far from a
foregone conclusion that we would."
"I can now say with some confidence that we have every chance to
do so, even while the pandemic and its aftershocks are far from
over."
Enquiries:
Isabelle Maddock, Chief Robert Finlay, Henry Willcocks,
Financial Officer John More
James Cropper PLC (AIM Shore Capital
:CRPR.L)
Telephone: +44 (0) 1539 Telephone: +44 (0) 20 7601 6100
722002
www.jamescropper.com
The Annual General Meeting of the Company will be held at
11.00am on Wednesday 28 July 2021 at the premises of TFP, Burneside
Mills, Kendal, Cumbria, subject to Covid - secure guidelines.
52 weeks
ended
27 March 52 weeks ended
2021 28 March 2020
Summary of results GBP'000 GBP'000
Revenue 78,768 104,667
Adjusted operating profit (excluding
IAS19 and exceptional items) 4,510 7,240
Adjusted profit before tax (excluding
IAS19 and exceptional items) 4,023 6,674
Impact of IAS 19 (802) (1,215)
Exceptional items (1,502) -
Profit before tax 1,719 5,459
--------------------------------------- ---------- ---------------
52 weeks
ended
27 March 52 weeks ended
2021 28 March 2020
GBP'000 GBP'000
Revenue
James Cropper Paper 51,376 75,545
James Cropper 3D Products 2,822 2,586
Technical Fibre Products 24,570 26,536
---------------------------------------- ---------- ---------------
78,768 104,667
Adjusted operating profit (excluding
IAS19 and exceptional items) 4,510 7,240
Net interest (excluding IAS19 impact) (487) (566)
---------------------------------------- ---------- ---------------
Adjusted profit before tax (excluding
IAS19 and exceptional items) 4,023 6,674
IAS19 pension adjustments
Net current service charge against
operating profits (563) (671)
Finance costs charged against interest (239) (544)
---------------------------------------- ---------- ---------------
(802) (1,215)
---------------------------------------- ---------- ---------------
Exceptional items
Restructuring costs (1,118) -
Transaction costs on acquisition
of a business (384) -
---------------------------------------- ---------- ---------------
(1,502) -
---------------------------------------- ---------- ---------------
Profit before tax 1,719 5,459
---------------------------------------- ---------- ---------------
The IAS 19 pension adjustments are explained in detail in the
Financial Review section of the Annual Report. The total amount
excluded from the IAS pension Charge is GBP802k (2020: GBP1,215k).
The adjustment, which we refer to in these accounts as the "IAS 19
impact" represents the difference between the pension charge as
calculated under IAS 19 and the cash contributions for the current
service cost only as determined by the latest triennial valuation.
The Directors consider that the adjusted pension charge better
reflects the actual pension costs for ongoing service compared to
the IAS 19 charge. This adjustment is made internally when we
assess performance and is also used in the EBITDA and EPS targets
used in management incentive schemes
The IAS 19 pension adjustment to the income statement of GBP802k
(2020: GBP1,215k ) comprises:
Period ended 27 March Period ended 28 March
2021 2020
GBP'000 GBP'000
Current service
charge 1,034 1,188
Normal contributions (471) (517)
Interest charge 239 544
--------------------------- ---------------------- ----------------------
IAS 19 pension adjustment 802 1,215
--------------------------- ---------------------- ----------------------
Balance sheet summary As at 27 March As at 28 March
2021 2020
GBP'000 GBP'000
Non-pension assets - excluding
cash 70,780 72,084
Non-pension liabilities - excluding
borrowings (18,444) (19,032)
------------------------------------- --------------- ---------------
52,336 53,052
Net IAS19 pension deficit (after
deferred tax) (14,933) (7,600)
------------------------------------- --------------- ---------------
37,403 45,452
Net borrowings (7,502) (11,055)
------------------------------------- --------------- ---------------
Equity shareholders' funds 29,901 34,397
Gearing % - before IAS19 deficit 17% 26%
Gearing % - after IAS19 deficit 25% 32%
Capital expenditure 3,127 9,195
Chairman's Letter
Dear Shareholders
As I wrote this letter last year, the pandemic was already upon
us. The outlook was very uncertain but nothing was being left to
chance. We had already implemented an eye-watering list of
adaptations in the first few weeks of lockdown, with much more
being planned to bring forward thereafter.
I am pleased to report that in the event the year has passed as
well as we might have hoped. We have managed to keep operating
throughout and most importantly our workforce has stayed safe.
While we have had positive Covid cases, transmission has been
controlled and no severe illness has resulted.
In financial terms, we have been able to report a profit before
tax of GBP1.7m for the year. This was down by 69% versus the prior
period while Group turnover fell by 25%, split between Paper
(-32%), TFP (-7%), and Colourform (+9%). The results are on the
positive side of breakeven thanks to the critical role government
employment assistance schemes in the UK and the US played in
supporting the Group. This totalled GBP2.9m and played a critical
role helping the Group retain employees.
The accounts also record GBP1.1m of exceptional costs relating
to a restructuring programme brought forward as a result of the
pandemic. This largely related to a strategic change moving us away
from a matrix structure and closer to vertically integrated
businesses with each Division having greater autonomy over its
vision and growth. The changes were predominantly in Paper and
central Group functions. The decision to move ahead with this was
not taken lightly, but it was essential to restructure in order to
secure a future for the Group. As it happened more than 90% of
those leaving chose voluntary redundancy. Many had worked for James
Cropper for decades and the number included our COO Dave Watson,
who played a critical role in the transformation of the Group since
joining us in 2014. I wish to thank everyone who left for
everything they have contributed over many years and their goodwill
and support for a process that is never easy.
This time last year I not only expressed concern about the
impact of Covid but many other factors, not least Brexit.
Thankfully this has passed without undue interruption or adverse
effect, even while the transition was a real rollercoaster ride.
This is truly a credit to all the teams that managed the situation.
Not surprisingly the workload was considerable, further increased
by our commitment to help our customers manage the process.
Another concern at the time of writing last year was whether we
could grow our way out of the current crisis in a way that respects
the environment, people and communities. This is a huge topic that
does not invite easy or quick solutions. However, we have begun to
map several ways forwards that will allow us to make material
improvements in the coming years.
First, we held a series of workshops over the summer of 2020 to
debate and agree the Group's purpose and values. This was a
highlight of the year for me. It is easy to be cynical about such
words and certainly purpose statements are a new fashion, but
truthfully we are a purposeful and values driven company and the
outputs truly came from the heart of the company - specifically a
huge cross-section of our employees from every level, function and
geography. It was the first time we have run such an exercise in
this way, and the outputs were as rich as they were clear and
simple. We now have three core values - to be forward-thinking,
caring and responsible - that truly speak for the ethos of the
Group, as does the purpose defined: to be makers of pioneering
materials to safeguard our future. There is already a close fit
between these and much of what we do, but there is also much work
required to truly live by them.
In terms of next steps, this is being ably overseen by a newly
convened ESG sub-committee of the board, as well as other
strategies that continue to gather pace, not least a programme to
deliver significant decarbonisation by 2030 and Paper's ambition to
use 50% waste fibre by 2025. Our growth and product development
strategies are also ever more aligned with helping our customers
and consumers reduce environmental impact, whether via greener
papers and packaging or the advanced materials TFP has developed
for a wide range of renewable energies.
In particular, TFP is fast forging itself a position in the
emerging green hydrogen industry (a field receiving much press of
late), both as makers of fuel cell and hydrogen electrolyser
components. The latter was significantly enhanced by the
acquisition of electrochemical pioneer PV3 Technologies in January
2021 and the formation of a dedicated business TFP Hydrogen to
focus on this area. I am especially excited by the transaction as
it begins to move the Group beyond materials into electrochemistry
with all kinds of potential for further innovation and growth.
Dividend
It will be no surprise to learn that no interim dividend has
been paid in the year and no final dividend is proposed. The Board
will consider reinstating a dividend as finances and other
limitations permit.
Outlook
Looking forwards, the potential we have across multiple products
and markets is huge, as is the potential for us to do better
within. The challenge now is to ensure that we understand how we
realise this and what is missing along the way. Crucially, we are
able to recommence capital investments put on hold last year. TFP's
fourth production line will shortly be commissioned and Paper's
wholesale upgrade to its finishing capabilities is back on
track.
That we find ourselves in this position speaks volumes for the
unprecedented commitment of everyone across the Group. I can't
speak for other companies or institutions but the strength of
character and positive outlook here has been beyond compare. We
have never looked downwards or inwards even if we have been stuck
behind our screens far too much. The work has been relentless, made
all the more intensive by social distancing and the need for
constant adaptation. Once again I offer my sincerest thanks and
gratitude to all and everyone associated with our business.
Our mantra since the earliest days of the Covid crisis has been
to "emerge stronger". This time last year it was far from a
foregone conclusion that we could. However, I can now say with some
confidence that we have every chance to do so, even while the
pandemic and its aftershocks are far from over.
Mark Cropper
Chairman
21 June 2021
Chief Executive's Review
Having dealt with the challenges from the pandemic, I am pleased
to report our results for the period. The immediate actions taken
by the Board and our employees enabled the company to continue to
trade in a Covid-secure environment throughout the period leaving
us in a strong position to continue to accelerate our growth
plans.
Our priorities throughout the pandemic have been foremost with
the health and wellbeing of our employees. Additionally, our focus
has been on supporting our customers, managing costs, preserving
cash, and latterly accelerating our growth plans, with our aim to
emerge from the pandemic as a stronger company. The company
responded swiftly, with the Executive directors forming a crisis
team initially meeting daily and latterly weekly to provide direct
leadership on all aspects. Sub teams were tasked to provide
frequent risk assessments and implement preventative measures way
beyond mandatory requirements to reduce the risk of infection,
providing a Covid-secure workplace. In addition, weekly
communication to all global employees provided updates on cases,
protective measures, and each business.
The impact on customer demand was seen across the group, with
Paper being the most significantly impacted. Overall, the company
saw a 25% reduction in demand, with Paper being impacted by a 32%
reduction across the portfolio, and TFP a reduction of 7% driven
mainly from the aerospace market. However, many markets in TFP were
unaffected, and some, including hydrogen, continued to grow. In
addition, Colourform continued to grow, despite a lower growth rate
due to the impact from the Pandemic.
The most significant impact was experienced within the first
half of the year, with a steady improvement through the second
half. With the continuation of robust business development
throughout, continued innovation and investments restarted, I am
optimistic the company is exceptionally well placed to emerge
stronger and accelerate growth in each business.
Revenue and operating profit
The financial impact of the pandemic on the business shows a 25%
fall in revenues and a fall of 69% in profit before tax. As a
consequence, earnings per share have fallen 68% to 16.4p per share
(2020: 50.6p per share).
Group revenue for the financial period was GBP78.8m, down 25% on
the prior period. Revenue for the Paper division fell by 32% in the
period to GBP51.4m generating a small profit, prior to exceptional
costs, of GBP0.4m compared to an operating profit of GBP3.4m in the
prior period. Revenue for the TFP division fell by 7% in the period
to GBP24.6m generating an operating profit of GBP6.9m, prior to
exceptional costs, compared to GBP7.8m in the prior period. Revenue
for Colourform grew by 9% in the period to GBP2.8m, generating an
operating loss of GBP1.4m, prior to exceptional costs, compared to
an operating loss of GBP1.4m in the prior period.
Capital Expenditure
Capital investments during the period were generally suspended
for most of the year, including the extension to the TFP building
and the additional line. Expenditure in the period amounted to
GBP3.1m compared to GBP9.2m in the prior period.
Group Strategy
Our group philosophy is to provide each business with the
flexibility and autonomy to maximise its potential.
Across the group, all businesses and functions share a common
purpose and values. However, the structure of the group has moved
from a matrix to vertically integrated businesses.
Each business owns its own individual vision and strategic
growth plan, which are supported by the group's functions.
-- Paper is focused on developing its portfolio to deliver
margin improvement. Target markets include luxury packaging, art,
design and print.
-- TFP are driving sales growth in niche markets and building
capacity and capability, including the recently acquired
acquisition. Target markets include hydrogen fuel cells, hydrogen
production (PEM), wind energy and aerospace.
-- Colourform is accelerating new projects to return rapid sales
growth in sustainable packaging. Target markets include packaging
for beauty, perfumes and high value wine & spirits.
The approach for each business to act independently sharpens the
target market focus and aligns the organisational , operational,
and technical needs for each.
Each business operates a divisional board, whose primary role is
to set the mid-term strategy (circa five years) to deploy and
achieve.
Investment for growth
Following a pause during the pandemic, all investment plans were
restarted by the start of the new financial year. In TFP, the
additional production line to create 50% increased capacity will be
operational by summer 2021 and ready to support our forward growth
plans. TFP will generate additional growth through the acquisition
of PV3 technologies, now known as TFP Hydrogen. Paper is creating
an increased capability to provide enhanced finishing such as
embossing and coatings, supporting the development of a more
technically advanced and higher-margin portfolio. Colourform is
focused on both capacity and capability increase to deliver further
customer offerings for sustainable packaging.
Innovation for growth
Innovation sits at the heart of the company, with around 100
employees directly involved with innovation programmes . Despite
the headwinds from the Pandemic, the company has continued to drive
innovation across the group.
Our dedicated technology & innovation team operate
independently to the businesses to deliver step-change. Key
activities include decarbonisation , water usage reduction and
reuse, and engagement with key universities and institutions
developing processes for upcycling waste materials. Within the
businesses, new products and technologies have been launched.
PaperGuard was launched earlier in the year and is proven to be
effective at reducing the presence of Covid-19 on the surface of
Paper by 99.9%.
New plating technologies have been launched to provide more
efficient and greater durability for the production of hydrogen
through PEM water hydrolysis.
Disruptive sustainable packaging has been launched with
customers such as the Champagne house Ruinart, providing packaging
nine times lighter and 60% reduced carbon footprint compared to its
previous traditional packaging with zero plastic and 100%
recyclable.
People & Organisation
The last year has seen some significant development in our
approach to our organisation .
Employees across each business and geography came together to
explore and define our Purpose and Values. Through a series of
highly engaged online workshops representing over 10% of all
employees helped to develop our Purpose; "Pioneering Materials to
Safeguard our Future" and our values: "Forward-thinking",
"Responsible", and "Caring". It is with these that will further
shape our decision making for future business, our
accountabilities, and our people.
The Company has traditionally taken great care to look after its
people, to safeguard the environment in which it operates, to act
responsibly and to develop sustainable manufacturing practices, and
so it is deeply encouraging to have these Values:
"Forward-thinking", "Responsible", and "Caring" affirmed. This year
we formally established an Environmental, Social and Governance
(ESG) committee to provide Board oversight of Group ESG priorities
and to monitor overall performance. Our priorities and some of the
early work of the ESG committee is described in this year's Annual
Report.
We undertook an exercise to restructure the organisation to
support accelerated growth and remove cost and complexity during
the year. Costs within the Paper business have been reduced by
GBP2m, whilst new opportunities have been created to support the
delivery of our growth plans.
The overall group structure has moved from a matrix organisation
to three vertically integrated businesses. This has removed some
complexity within the group and provides increased autonomy and
responsibility for each business.
Additionally, throughout the year, we have recognised
outstanding achievements from our employees through our Pride
Awards. I was delighted to see 32 of our employees were presented a
Pride Award within the year.
Supporting early careers is a key priority for the company
through apprenticeships and graduate recruitment as we build future
talent. The company currently support 24 apprentices across a range
of disciplines, and 4 new technical graduates have joined the
company in the last year.
Despite the challenges of the pandemic and the difficult actions
the Company has had to take this year, it is rewarding to see how
far we have come in organizational development, setting this Group
up for a stronger and more prosperous future.
Phil Wild
Chief Executive Officer
21 June 2021
From the Chief Financial Officer's Review:
Cash flow
In the period the Group's net cash outflow was GBP2,199k (2020:
inflow GBP6,612k), the weaker pandemic driven performance in the
year initiating a cash outflow which was alleviated with the
assistance from government support schemes and other arrangements
with stakeholders, all of which prevented a much more damaging
position. In the early months of the pandemic we took swift action
to reduce costs and protect liquidity. This included the deferral
of all discretionary spending, suspension of major capital
expenditure, suspension of dividend payments, and seeking support
from local authorities, the pension scheme trustee, government
agencies and the banks. Government support is explained under Other
Income. Past service deficit payments of GBP498k were made in
agreement with the trustee as part of the cash safeguarding
measures, payments restart at GBP1,300k in accordance with the
schedule from April 2021.
Capital investment in the period was GBP3,127k (2020:
GBP9,195k). Investments are driven by the requirement to enable
growth, largely in the form of generating revenue by increasing
capacity, improving capability or generating cost savings. Other
expenditure supports resilience, safety and workplace improvements.
Investments immediately at the start of the year were curtailed or
deferred to safeguard cash. This included the build of an
additional nonwoven production line in TFP, this work recommenced
in January 2021 and will be completed in the 3rd calendar quarter
of this year delivering an additional 50% capacity in TFP to
support future growth. An acquisition was made in TFP Hydrogen
Limited with a small upfront cost for 100% ownership and an earn
out payable in the future subject to performance, this allows TFP
to accelerate its position into the rapidly growing hydrogen
market, providing significant growth potential and helping to
further build our future.
The closing cash position for the Group is GBP6,765k (2020:
GBP8,964k)
Funding and facilities
The Group funds its operations and investments from operating
cash flow and from borrowings and leases. The Group has 2 revolving
credit facilities secured with a high street bank of which one is a
Coronavirus Large Business Interruption Loan (CLBIL) facility.
Revolving credit facilities provide the Group with optional draw
down at short notice, repayment flexibility, reduced margins and
facilities on an unsecured basis. Total revolving credit facilities
amount to GBP9,000k of which GBP1,808k is drawn down at the period
end. The CLBIL is a GBP4,000k facility of which GBP3,900k is
unutilised and it was secured in October 2020 to bring additional
cash protection should it be required in the face of continued
uncertainty.
Cash and cash equivalents decreased from GBP8,964k to GBP6,765k
in the year whilst long term borrowings (falling due after more
than a year) decreased by GBP10,297k to GBP5,966k. The Group has
one large, short term debt maturity on the horizon of $6m which is
expected to be renewed in Dec 2021. The expiry profile of existing
borrowings is detailed in note 19.3 to the financial statements.
The group is in compliance with all its banking covenants at the
period end.
Undrawn facilities comprise of unused overdraft facilities of
GBP3,600k plus the total unused credit facilities of GBP7,660k,
this means a total of GBP11,260k remains unutilised at the year-end
date.
Having taken account of current borrowings to be paid within 12
months of the balance sheet date the Group has GBP9,724k available
to the Group beyond 12 months. Within 12 months from the date of
signing the financial statements, two ongoing facilities ($6m and
GBP5m) are due for renewal (Dec 2021 and May 2022) and, based on
discussions with the bank, the directors expect these to be
renewed.
Funding 2021 2020 Change
GBP'000 GBP'000 GBP'000
Borrowings: repayable within
one year 8,301 3,756 4,525
Borrowings: non-current 5,966 16,263 (10,297)
Facilities drawn down 14,267 20,019 (5,752)
------------------------------ -------- -------- ---------
Undrawn facilities 11,260 5,367 5,893
------------------------------ -------- -------- ---------
Facilities 25,527 25,386 141
Cash and cash equivalents 6,765 8,964 (2,199)
Undrawn facilities 11,260 5,367 5,893
Funds available at year end 18,025 14,331 3,694
------------------------------ -------- -------- ---------
Borrowings: repayable within
one year (8,301) (3,756) (4,545)
Funds available in excess of
one year 9,724 10,575 (851)
------------------------------ -------- -------- ---------
Net debt
During the period net debt decreased by GBP3,553k to GBP7,502k.
The Group has adopted IFRS 16 and incorporates GBP3,771k (2020:
GBP4,328k) of right-of-use leases in its 2021 borrowings
figure.
The Groups banking arrangements monitor net debt excluding
right-of-use leases (Rou). On this basis net debt is reduced to
GBP3,731k from GBP6,727k in the previous year, a reduction of
GBP2,996k.
Net Debt before RoU leases 2021 2020
GBP'000 GBP'000
-------------------------------------- --------- ---------
Cash and cash equivalents 6,765 8,964
All Borrowings excluding RoU
leases (10,496) (15,691)
Net debt on an equivalent comparison
basis (3,731) (6,727)
-------------------------------------- --------- ---------
Going concern
The Directors carry out a review of the Group's financial
position for the three years to March 2024, providing a
comprehensive review of revenue, expenditure and cash flows taking
into account specific business risks, requirements and latest
economic forecasts. These inform the Group's cash and debt
requirements.
The Group's financial position, cash flows, liquidity and
borrowing facilities are described in the financial statements and
also clarified in this section of the annual report. At 27 March
2021 James Cropper had GBP7,660k of undrawn committed facilities
and an un-utilised overdraft facility of GBP3,600k. The principal
loan arrangements and maturity dates are described in note 19.3 of
the financial statements. Taking into account current borrowings to
be paid within 12 months of the balance sheet date the Group has
GBP9,724k available to the Group beyond 12 months. . Within 12
months from the date of signing the financial statements, two
ongoing facilities ($6m and GBP5m) are due for renewal (Dec 2021
and May 2022) and, based on discussions with the bank, the
directors expect these to be renewed.
The Group's three year plan has been tested for plausible
downsides scenarios including further expected effects of the
pandemic, hampered market growth, increasing carbon cost and
commodity prices. In the event that a scenario partly or fully
takes place the Group has various options available to maintain
liquidity and continue operations. We have assessed the combined
impact of these scenarios on the Group's key financial metrics of
EBITDA, net debt and net debt to underlying EBITDA. The Group
remains within its key financial covenant which is its net debt to
underlying EBITDA ratio must not exceed 3.5 times. The break-even
calculation indicates that EBITDA would need to fall 85% compared
to the three year plan before triggering the covenant. The Board is
satisfied that the Group will be able to respond to such scenarios
through various means which may include a reduced or deferred
capital expenditure programme to ensure that the Group continues to
meet its ongoing obligations.
The Board is satisfied that the Group will have sufficient
liquidity to meet its needs over the planning horizon. The
directors have a reasonable expectation that the Group remains
viable over the planning horizon.
The Board is satisfied it has sufficient cash resources to meet
its obligations as they fall due throughout this duration and the
Board has a reasonable expectation that the Company and the Group
has adequate resources to continue in operational existence for at
least 12 months from the date of signing the financial
statements.
CONSOLIDATED INCOME STATEMENT
52 week period 52 week period
to 27 March to 28 March
2021 2020
----------------------------------------- -------------- --------------
GBP'000 GBP'000
Revenue 78,768 104,667
Provision for impairment (431) (308)
Other income 3,036 486
Changes in inventories of finished goods
and work in progress 598 (1,330)
Raw materials and consumables used (28,290) (38,200)
Energy costs (3,078) (4,539)
Employee benefit costs (28,417) (30,388)
Depreciation and amortisation (4,489) (3,950)
Other expenses (15,252) (19,869)
----------------------------------------- -------------- --------------
Operating Profit 2,445 6,569
Interest payable and similar charges (730) (1,136)
Interest receivable and similar income 4 26
Profit before taxation 1,719 5,459
Taxation (153) (630)
----------------------------------------- -------------- --------------
Profit for the period 1,566 4,829
Earnings per share - basic and diluted 16.4p 50.6p
OTHER COMPREHENSIVE INCOME
Profit for the period 1,566 4,829
-------------------------------------------- -------- --------
Items that are or may be reclassified
to profit or loss
Exchange differences on translation of
foreign operations (80) 181
Pulp hedge fair value adjustment 501 -
Cash flow hedges - effective portion
of changes in fair value 258 (295)
Items that will never be reclassified
to profit or loss
Retirement benefit liabilities - actuarial
(losses)/gains (8,750) 13,057
Deferred tax on actuarial losses/(gains)
on retirement benefit liabilities 1,663 (2,481)
Other comprehensive (expense)/income
for the period (6,408) 10,462
-------------------------------------------- -------- --------
Total comprehensive (expense)/income
for the period
Attributable to equity holders of the
Company (4,842) 15,291
-------------------------------------------- -------- --------
STATEMENT OF FINANCIAL POSITION
Group Company
As at As at As at As at
27 March 2021 28 March 2020 27 March 2021 28 March 2020
GBP'000 GBP'000 GBP'000 GBP'000
------------------------------- -------------- --------------- --------------- ----------------
Assets
Goodwill 1,264 - - -
Intangible assets 1,946 495 1,013 366
Property, plant and equipment 30,696 31,882 1,774 1,925
Right-of-use assets 4,160 4,907 236 301
Investments in subsidiary
undertakings - - 7,350 7,350
Deferred tax assets 3,729 1,921 3,706 1,934
------------------------------- -------------- --------------- --------------- ----------------
Total non-current assets 41,795 39,205 14,079 11,876
------------------------------- -------------- --------------- --------------- ----------------
Inventories 15,469 13,956 - -
Trade and other receivables 16,053 19,363 50,863 51,455
Provision for impairment (961) (530) (260) (350)
Other financial assets 501 - - -
Cash and cash equivalents 6,765 8,964 2,861 6,638
Corporation tax 1,425 1,872 1,384 1,509
Total current assets 39,252 43,625 54,848 59,272
------------------------------- -------------- --------------- --------------- ----------------
Total assets 81,047 82,830 68,927 71,148
------------------------------- -------------- --------------- --------------- ----------------
Liabilities
Trade and other payables 15,780 16,544 22,989 23,421
Other financial liabilities 16 275 16 275
Loans and borrowings 8,301 3,756 94 174
Total current liabilities 24,097 20,575 23,099 23,870
------------------------------- -------------- --------------- --------------- ----------------
Long-term borrowings 5,966 16,263 211 7,983
Retirement benefit liabilities 18,436 9,382 18,436 9,382
Deferred consideration on
business acquisition 401 - - -
Deferred tax liabilities 2,246 2,213 94 174
Total non-current liabilities 27,049 27,858 18,749 17,479
------------------------------- -------------- --------------- --------------- ----------------
Total liabilities 51,146 48,433 41,848 41,349
------------------------------- -------------- --------------- --------------- ----------------
Equity
------------------------------- -------------- --------------- --------------- ----------------
Share capital 2,389 2,389 2,389 2,389
Share premium 1,588 1,588 1,588 1,588
Translation reserve 504 584 - -
Reserve for own shares (1,151) (1,251) (1,151) (1,251)
Hedging reserve 501 - - -
Retained earnings 26,070 31,087 24,253 27,073
------------------------------- -------------- --------------- --------------- ----------------
Total shareholders' equity 29,901 34,397 27,079 29,799
------------------------------- -------------- --------------- --------------- ----------------
Total equity and liabilities 81,047 82,830 68,927 71,148
------------------------------- -------------- --------------- --------------- ----------------
The Parent Company reported a profit for the period ended 27
March 2021 of GBP4,072k (2020: GBP3,416k).
STATEMENT OF CASH FLOWS
Group
52 weeks ended 27 52 weeks ended 28
March 2021 March 2020
GBP'000 GBP'000
----------------------------------------- ------------------ ------------------
Cash flows from operating activities
Net profit 1,566 4,829
Adjustments for:
Tax 153 630
Depreciation and amortisation 4,489 3,950
Transaction costs on business
acquisition 384 -
Net IAS 19 pension adjustments
within SCI 802 1,215
Past service pension deficit
payments (498) (1,424)
Foreign exchange differences 783 (74)
Loss on disposal of property,
plant and equipment - 23
Gain on early termination of
Right-of use assets (19) -
Bank Interest income (4) (26)
Bank interest expense 491 592
Share based payments 245 (252)
(Increase)/decrease in inventories (1,448) 2,475
Decrease in trade and other receivables 3,401 149
(Decrease)/increase in trade
and other payables (2,406) 1,719
Tax paid - (741)
----------------------------------------- ------------------ ------------------
Net cash generated from operating
activities 7,939 13,065
Cash flows from investing activities
Purchase on intangible assets (42) (190)
Purchase of property, plant and
equipment (3,085) (9,005)
Acquisition of business net of
cash and cash equivalents (1,359) -
Net cash used in investing activities (4,486) (9,195)
Cash flows from financing activities
Proceeds from issue of new loans 6,390 9,121
Repayment of borrowings (10,313) (3,301)
Repayment of lease liabilities (818) (1,488)
Interest received 4 26
Interest paid (353) (434)
Distribution of own shares 100 -
Dividends paid to shareholders - (1,275)
----------------------------------------- ------------------ ------------------
Net cash (used)/generated from
financing activities (4,990) 2,649
Net (decrease)/increase in cash
and cash equivalents (1,537) 6,519
Effect of exchange rate fluctuations
on cash held (662) 93
----------------------------------------- ------------------ ------------------
Net (decrease)/increase in cash
and cash equivalents (2,199) 6,612
Cash and cash equivalents at
the start of the period 8,964 2,352
Cash and cash equivalents at
the end of the period 6,765 8,964
Cash and cash equivalents consists
of:
Cash at bank and in hand 6,765 8,964
6,765 8,964
----------------------------------------- ------------------ ------------------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share Share Translation Hedging Retained
capital premium reserve Own shares reserve earnings Total
------------------------ ------------- ----------- ------------- ------------ --------- ----------- -----------
Group GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------ ------------- ----------- ------------- ------------ --------- ----------- -----------
At 30 March 2019 2,389 1,588 403 (1,251) - 18,147 21,276
Adjustment on initial
application
of IFRS 16 - - - - - (519) (519)
------------------------ ------------- ----------- ------------- ------------ --------- ----------- -----------
At 31 March 2019 2,389 1,588 403 (1,251) - 17,628 20,757
Comprehensive income for
the
period - - - - - 4,829 4,829
Total other
comprehensive income - - 181 - - 10,281 10,462
Dividends paid - - - - - (1,275) (1,275)
Share based payment
charge - - - - - (376) (376)
------------------------ ------------- ----------- ------------- ------------ --------- ----------- -----------
Total contributions by
and
distributions to owners
of
the Group - - - - - (1,651) (1,651)
------------------------ ------------- ----------- ------------- ------------ --------- ----------- -----------
At 28 March 2020 2,389 1,588 584 (1,251) - 31,087 34,397
Comprehensive income for
the
period - - - - - 1,566 1,566
Total other
comprehensive income - - (80) - 501 (6,829) (6,408)
Distributions of own
shares - - - 100 - - 100
Share based payment
charge - - - - - 246 246
Total contributions by
and
distributions to owners
of
the Group - - - 100 246 346
------------------------ ------------- ----------- ------------- ------------ --------- ----------- -----------
At 27 March 2021 2,389 1,588 504 (1,151) 501 26,070 29,901
------------------------ ------------- ----------- ------------- ------------ --------- ----------- -----------
Share Share Retained
capital premium Own shares earnings Total
Company GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------------------------- --------- --------- ----------- ---------- --------
At 30 March 2019 2,389 1,588 (1,251) 14,701 17,427
Adjustment on initial application
of IFRS 16 - - - 24 24
----------------------------------- --------- --------- ----------- ---------- --------
At 31 march 2019 2,389 1,588 (1,251) 14,725 17,451
Comprehensive income for
the period - - - 3,416 3,416
Total other comprehensive
income - - - 10,583 10,583
Dividends paid - - - (1,275) (1,263)
Share based payment charge - - - (376) (376)
----------------------------------- --------- --------- ----------- ---------- --------
Total contributions by and
distributions to owners of
the Group - - - (1,651) (1,651)
----------------------------------- --------- --------- ----------- ---------- --------
At 28 March 2020 2,389 1,588 (1,251) 27,073 29,799
Comprehensive income for
the period - - - 4,072 4,072
Total other comprehensive
income - - - (7,137) (7,137)
Distribution of own shares - - 100 - 100
Share based payment charge - - - 245 245
Total contributions by and
distributions to owners of
the Group - - 100 245 345
----------------------------------- --------- --------- ----------- ---------- --------
At 27 March 2021 2,389 1,588 (1,151) 24,253 27,079
----------------------------------- --------- --------- ----------- ---------- --------
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1 BASIS OF PREPARATION
James Cropper Plc (the Company) is a public limited company
incorporated and domiciled in the United Kingdom and listed on the
Alternative Investment Market (AIM). The condensed consolidated
financial statements of the Company for the 52 weeks ended 27 March
2021, comprise the Company and its subsidiaries (together referred
to as the Group).
Statement of compliance
The condensed consolidated financial statements have been
prepared in accordance with international accounting standards in
conformity with the requirements of the Companies Act 2006. As
required by the Disclosure and Transparency Rules of the Financial
Services Authority, the condensed consolidated set of financial
statements have been prepared applying the accounting policies and
presentation that were applied in the preparation of the Group's
published consolidated financial statements for the 52 week period
ended 27 March 2021. They do not include all the information
required for full annual financial statements, and should be read
in conjunction with the consolidated financial statements of the
Group for the 52 week period ended 27 March 2021.
The consolidated financial statements of the Group for the 52
week period ended 27 March 2021 are available upon request from the
Company's registered office Burneside Mills, Kendal, Cumbria, LA9
6PZ or at www.jamescropper.com .
The financial information is presented in Sterling and all
values are rounded to the nearest thousand pounds (GBP'000) except
where otherwise indicated.
Going concern
The Directors have performed a robust assessment, including
review of the forecast for the 52 week period ending 26 March 2022
and longer term strategic forecasts and plans, including
consideration of the principal risks faced by the Group and the
Company, including the potential impact of Covid 19 on the
business, as detailed in the Group's Annual Report 2021. Following
this review the Directors are satisfied that the Company and the
Group have adequate resources to continue in operational existence
for the foreseeable future. Accordingly they continue to adopt the
going concern basis in preparing the condensed consolidated
financial statements.
Significant accounting policies
The accounting policies applied by the Group in these condensed
consolidated financial statements are the same as those applied by
the Group in its consolidated financial statements as at and for
the 52 week period ended 27 March 2021.
2 Accounting estimates and judgements
The preparation of the financial statements requires management
to make judgements, estimates and assumptions that affect the
application of accounting policies and the reported amounts of
assets and liabilities, income and expenses. Actual results may
differ from these estimates.
The significant judgements made by management in applying the
Group's accounting policies and the key sources of estimation
uncertainty were the same as those applied to the consolidated
financial statements as at and for the 52 week period ended 27
March 2021.
3 Risks and uncertainties
The principal risks and uncertainties which may have the largest
impact on performance are disclosed in the 2021 Annual Report on
pages 20-25, namely:
Pandemic risk; Employee health and safety; climate change;
energy price volatility; pulp price volatility and sustainability;
exchange rate volatility; pension and information security and
cyber risk.
The Board considers that the principal risks and uncertainties
set out in the 2021 Annual Report remain relevant for the current
financial year.
4 Alternative performance measures
The Company uses alternative performance measures to allow users
of the financial statements to gain a clearer understanding of the
underlying performance of the business.
Profit before tax represents the Group's overall performance and
financial position, however it contains significant non-operational
items relating to IAS 19 that the directors believe obscure an
understanding of the key performance trend.
Measures used to evaluate business performance are 'Adjusted
operating profit' (operating profit excluding the impact of IAS 19
and exceptional costs), and 'Adjusted profit before tax' (profit
before tax excluding the impact of IAS 19 and exceptional costs).
The alternative performance measures are reconciled in note 9.
5 Earnings per share
The calculation of basic earnings per share is based on earnings
attributable to ordinary shareholders divided by the weighted
average number of shares in issue during the year. The calculation
of diluted earnings per share is based on the basic earnings per
share adjusted to assume conversion of all dilutive options.
6 Segmental information
IFRS 8 Operating Segments - requires that entities adopt the
'management approach' to reporting the financial performance of its
operating segments. Management has determined the segments that are
reported in a manner consistent with the internal reporting
provided to the chief operating decision maker, identified as the
Executive Committee that makes strategic decisions. The committee
considers the business principally via the four main operating
segments, principally based in the UK:
-- James Cropper Paper Products (Paper): comprising:
-- JC Speciality Papers - relates to James Cropper Speciality
Papers a manufacturer of specialist paper and boards.
-- JC Converting - relates to James Cropper Converting - a
converter of paper.
-- James Cropper 3D Products (Colourform) - a manufacturer of
moulded fibre products.
-- Technical Fibre Products (TFP) - a manufacturer of advanced
materials.
-- Group Services - comprises central functions providing
services to the subsidiary companies.
Operating profit /
Revenue (loss)
52 week period 52 week period 52 week period
ended ended ended 52 week period
27 March 28 March 27 March ended 28
2021 2020 2021 March 2020
GBP'000 GBP'000 GBP'000 GBP'000
Paper 51,376 75,545 (309) 3,406
Colourform 2,822 2,586 (1,542) (1,378)
TFP 24,570 26,536 6,482 7,753
Group services and other - - (2,186) (3,212)
-------------------------- --------------- --------------- --------------- ---------------
78,768 104,667 2,445 6,569
-------------------------- --------------- --------------- --------------- ---------------
7 Dividend
As part of the cash preservation exercise undertaken to mitigate
the impact of the Covid 19 pandemic, no interim dividend was paid
in the period and the Board are not recommending a final dividend.
(2020: nil per ordinary share).
8 Retirement benefit obligations
Movements during the period in the Group's defined benefit
pension schemes are set out below:
52 week period 52 week period
ended ended
27 March 2021 28 March 2020
--------------------------------- ------------------ ------------------
GBP'000 GBP'000
Obligation brought forward (9,382) (22,648)
Expense recognised in the
income statement (1,273) (1,732)
Contributions paid to the
schemes 969 1,941
Actuarial (losses) and gains (8,750) 13,057
--------------------------------- ------------------ ------------------
Obligation carried forward (18,436) (9,382)
--------------------------------- ------------------ ------------------
9 Alternative performance measures
52 week period ended 52 week period ended
27 March 2021 28 March 2020
GBP'000 GBP'000
Adjusted operating profit 4,510 7,240
Net IAS 19 pension adjustments:
current service costs (1,034) (1,188)
future service contributions
paid 471 517
Exceptional Items:
restructuring costs (1,118) -
Transaction costs on acquisition
of business (384) -
Operating profit 2,445 6,569
------------------------------------- ------------------------ ------------------------
52 week period ended 52 week period ended
27 March 2021 28 March 2020
GBP'000 GBP'000
Adjusted profit before tax 4,023 6,674
Net IAS 19 pension adjustments:
current service costs (1,034) (1,188)
future service contributions
paid 471 517
finance costs (239) (544)
Exceptional items:
Restructuring costs (1,118) -
Transaction costs on acquisition
of business (384) -
Profit before tax 1,719 5,459
--------------------------------------------------------- ------------------------ ------------------------
10 Related parties
There have been no significant changes in the nature of related
party transactions in the period ended 27 March 2021 from that
disclosed in the 2020 Annual report.
Statement of Directors' responsibilities
The Directors confirm that these condensed consolidated
financial statements have been prepared in accordance with
International Financial Reporting standards as adopted by the
European Union and that the preliminary report includes a fair
review of the information required by DTR 4.2.7 and DTR 4.2.8,
namely:
(i) An indication of important events that have occurred during
the period and their impact on the condensed set of financial
statements, and a description of the principal risks and
uncertainties for the financial period; and
(ii) Material related party transactions in the period and any
material changes in the related party transactions described in the
last Annual report.
The Directors of James Cropper Plc are detailed on our Group
website www.jamescropper.com
Forward-looking statements
Sections of this financial report may contain forward-looking
statements with respect to the Group's plans and expectations
relating to its future performance, results, strategic initiatives,
objectives and financial position, including liquidity and capital
resources. These forward-looking statements are not guarantees of
future performance. By their very nature, all forward-looking
statements involve risks and uncertainties because they relate to
events that may or may not occur in the future and are or may be
beyond the Group's control. Accordingly, the Group's actual results
and financial condition may differ materially from those expressed
or implied in any forward-looking statements. Forward-looking
statements in this financial report are current only as of the date
on which such statements are made. The Group undertakes no
obligation to update any forward-looking statements, save in
respect of any requirement under applicable law or regulation.
Nothing in this announcement shall be construed as a profit
forecast.
Content of this report
The financial information set out above does not constitute the
Group's statutory accounts for the 12 months ended 27 March 2021 or
28 March 2020 but is derived from those accounts.
Statutory accounts for the 12 months ended 28 March 2020 have
been delivered to the Registrar of Companies. The auditor, BDO LLP,
has reported on the 2020 accounts; the report (i) was unqualified,
(ii) did not include a reference to any matters to which the
auditor drew attention by way of emphasis without qualifying their
report, and (iii) did not contain a statement under section 498 (2)
or (3) of the Companies Act 2006.
The statutory accounts for the 12 month period ended 27 March
2021 will be delivered to the Registrar of Companies following the
Annual General Meeting. The auditor, BDO LLP, has reported on these
accounts; their report (i) is unqualified, (ii) does not include a
reference to any matters to which the auditor drew attention by way
of emphasis without qualifying their report, and (iii) does not
include a statement under either section 498 (2) or (3) of the
Companies act 2006.
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END
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